Housing Bubble Bursting?

[Randolph Kinney]

But the price of crude oil dropped substantially over the past two weeks...hmmm.

Mike,

What is often quoted in the news is the spot price of oil. That is, if you HAVE to buy oil right now, you go into the spot market and pay that price for light sweet crude.

Oil is imported under contract prices that may have be negotiated a year ago. It may be a different grade of oil too. Spot prices will eventually show up in the contract price as contracts expire or are filled to the amount bought.

 

[Randolph Kinney]

Stocks to open sharply lower on global credit woes

NEW YORK (MarketWatch) - U.S. stocks on Friday were positioned for another dive at the start, with the Federal Reserve joining other central banks in funneling funds into the markets for a second day to ease the flow of credit and quell fears about a global credit crunch.

"Talk of an emergency Fed meeting and rate cut is making the rounds this morning, not surprisingly, as fear overwhelms the markets," said analysts at Action Economics.

The Fed early Friday said it injected $19 billion into the banking system. The European Central Bank added another $83.6 billion, after Thursday's $130 billion injection, and the Bank of Japan on Friday added $8.5 billion.

The U.S. Federal Reserve on Thursday added $24 billion in temporary reserves, and Canada's central bank put $1.55 billion into the markets.

 

[Randolph Kinney]

More hedge funds catch contagion

Goldman hedge funds bleeding money

Hedge-fund world shaken by liquidation of big portfolio

 

[moh malekpour]

Bernanke Was Wrong: Subprime Contagion Is Spreading

http://www.bloomberg.com/apps/news?pid=20601103&sid=a.pPEmZeZZCk&refer=us

Aug. 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke was wrong.

So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O'Neal.

The subprime mortgage industry's problems were contained, they all said. It turns out that the turmoil was contagious.

 

[Randolph Kinney]

IndyMac reveals mortgage policy shift

http://www.indymacb2b.com/B2BAuto/eMITS/lenderGuide/bulletins/bulletin07-29.pdf

Wholesale Lending
Lending Guide Bulletin 07- 29
August 3, 2007

In response to recent liquidity issues in the secondary mortgage market, we have found it necessary to revise a number of our program limits and underwriting guidelines. The following revisions became effective for loans that were not rate locked prior to 12:00 p.m. Pacific Time today. The Indymac Lending Guide will be updated to reflect the changes shortly.

Alt-A pay option ARMs, short-term ARMs and second mortgages have become the lepers of the mortgage community. Investors won’t take them and now IndyMac and others are just praying that your lock will expire before you fund and they have to eat it at a loss or hold garbage on their books. Either way it hurts their liquidity.

 

[Greg Bell]

Donald Trump says there will be a recession and if the Fed doesn't lower rates
right now we will be in much deeper doo doo than a simple little recession.
He hath spoken...

 

[Austin]

I know a bank that lends money for 1% interest. Unfortunately, they are out of money. But hey! You can't beat that rate.

 

[Randolph Kinney]

FED is aggressive, more liquidity added second time

Fed injects $16 bln in liquidity in Friday's second action

 

[Randolph Kinney]

Countrywide, WAMU - punished for revealing mortgage problems

Financial Stocks: Mortgage-market fallout rattles shares of lenders, banks

NEW YORK (MarketWatch) -- Financial stocks fell sharply to start Friday as fears of a systemwide seizure in the secondary mortgage market and a broadening credit crunch sent shivers through investors.

The Federal Reserve acknowledged the problems Friday morning, steppping in to buy $19 billion of mortgage securities and telling world markets it will assure liquidity.

The U.S. central bank said it's providing liquidity "to facilitate the orderly functioning of financial markets." In a statement, the Fed said it will provide reserves "as necessary" through open-market operations to promote trading in the federal funds market at rates close to 5.25%.

In addition, the Fed noted that banks may experience "unusual funding needs because of dislocations in money and credit markets." Other central banks injected funds overnight.

Against this backdrop, shares of Countrywide Financial and Washington Mutual were the sector's big losers. Both companies warned about mortgage problems hurting earnings.

 

[Randolph Kinney]

More liquidity !

NewsWatch: Central banks inject over $100 billion more

LONDON (MarketWatch) -- Central banks in Europe, Asia and the U.S. injected billions of dollars into banking systems Friday, moving to further boost liquidity in markets suffering the ripple effect of the subprime-credit crisis and saying they stood willing to provide more cash.